form 8881
Answers
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Do you owe taxes in order for the auto-enrollment credit to offset that? I think this is a non-refundable credit. So it can only bring your taxes owed to $0 and not give you money back beyond that. (Although I believe you may be able to carry the credit forward to future years if you don't owe enough taxes this year to use it against.)
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Hi jbpumpson,
The small employer auto-enrollment credit is a nonrefundable tax credit. This means it can reduce the amount of income tax to zero, but it will not result in a refund if the credit amount is more than the tax liability.
So, your tax due may already be down to $0. If you need help figuring that out, I suggest you contact Customer Support directly to look at your return.1 -
Ah-you're right. Thanks!
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General business credits are non-refundable credits, meaning they can't decrease your total tax to less than $0, or increase a refund. All facts and circumstances on your tax return work together. Without knowing all the details of your return, please also bare in mind the 2025 software program is not yet fully released. Please contact Support for more specific help on your tax return.
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This is all correct. But am I also correct that if you can't fully use the auto-enrollment credit in one year, you can carry forward the unused portion and use it in a future year? If so, it would be good to know this to tell people and maybe for the software itself to tell people who end up in that situation. Also that means the software should have a way for people who do carry forward that credit to apply it in a future year. Does this make sense?
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Hi lp27,
I recommend that you contact the FreeTaxUSA customer support. Someone will be able to look at the return you are entering.
When the Auto-enrollment credit for $500 cannot all be used then it may be carried forward as a general business credit on Form 3800, Line 34. However, at this time the general business credit carryforward on form 3800 is not currently supported in the software. We are looking into it and working on it.
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This situation doesn't apply to me. I will have enough to claim the auto-enrollment credit against on my 2025 taxes. I was just pointing out that the carryforward exists for the person earlier in the thread who appeared to be in position to need it. And I wanted to make sure FreeTaxUSA knows about it so they may want to work on making it possible to use the carryforward for people like that other poster who need it.
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Hi lp27,
Thank you. We are aware of the carryforward.
Thank you for your contributions on the topic.
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